Cotton farmers in the United States are expected to boost acreage by 6.2 per cent this year as weak market prices for competing crops including corn and soybeans lead them to devote more area to the fiber. Last year, farmers planted 8.6 million acres of cotton. That was the lowest level since 1983. With an abandonment rate of 11 per cent, just 8.1 million acres of cotton were harvested last year in the US.
While cotton prices had changed little over the past year, drops in grain prices, which compete with the fiber for acreage, would likely encourage farmers to plant cotton. Prices have traded in a tight range for much of the past one and a half years amid uncertainty about China’s plans to release its massive cotton stockpile.
Front-month corn prices closed 2015 down nearly 10 per cent and benchmark soybean futures closed the year down nearly 15 per cent. Both are still trading well below year-ago levels. Price ratios of cotton to competing crops are a bit more favorable than in 2015.
Plantings in the world’s biggest exporter are expected to rise to 9.1 million acres in 2016, slightly lower than median expectations of 9.7 million acres.